Top U.K. Execs Earn Higher Base Salary, Lower Total Pay Than U.S. Chiefs, Study Finds

While the base pay for top CEOs is typically 20 percent higher in Europe than in the United States, bonuses and other incentives are much lower, resulting in significantly better overall pay for top american executives, a new survey by the Hay Group finds.

by Joseph McCafferty | January 31, 2008

While the base pay for top CEOs is typically 20 percenthigher in Europe than in the United States, bonuses and other incentives aremuch lower, resulting in significantly better overall pay for top American executives, a new survey by the Hay Group finds.

The study, “How ChiefExecutives are Paid,” compares the level and structure of CEO pay packages at 100 of the largest companies in Europe and the United States, and finds thattop European CEOs earn less than half as much as their U.S. counterparts. WhileEuropean CEOs receive an average base salary of about about $1.9million, U.S.executives only earn about about $1.6 million.

However, the report reveals a striking contrast in apparentapproaches towards rewarding performance. While European packages provide a more of an even balance between base salary and annual and long-term incentives, U.S. companies provide more of the CEO’s package through annual bonuses andshare-based, long-term incentive arrangements.

Total compensation packages for the top European chiefstypically near $8.9million, but are closer to $19.3 million for U.S. executives, nearlytwo-and-a-half times higher. Of the top European CEOs, French chiefs are thebest rewarded on the continent.

In a typical package, the value of bonuses and long-term incentivessubstantially exceeds that of base salary, significantly bolstering CEO pay.Still, the number and balance of the incentives vary greatly from country tocountry.

Top U.K. Execs Earn Higher Base Salary, Lower Total Pay Than U.S. Chiefs, Study Finds

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